The Reserve Bank of India (RBI) bought R10,776 crore of government bonds through an open-market operation (OMO) on Friday, lower than the notified R12,000 crore. The RBI bought the 9.15% bonds maturing in 2024 at R10,661 crore, yielding 8.2951%, lower than a Reuters poll forecast of 8.3013%.
The central bank rejected all bids for 8.35% bonds maturing in 2022. A Reuters poll had forecast 8.2955% or R100.35 cut-off for the 2022 bonds. For the 8.28% bonds maturing in 2027, the central bank set the cut-off at R98.15 for a yield of 8.4958%, lower than the poll forecast of 8.5017%. The central bank bought the 8.28% bonds maturing in 2032 at R97.94, yielding 8.4952%, lower than the forecast of 8.5285% in the poll.
Meanwhile, the benchmark bonds gained on speculation the central bank will reduce the cash reserve ratio again to ease a cash shortage in the banking system.
Lenders borrowed a record R1.92 lakh crore at the RBI?s repurchase auction on Thursday, according to RBI data, three times the maximum of R60,000 crore favoured by the monetary authority. The amount lent by the monetary authority on Friday was R1.71 lakh crore. The RBI cut the amount of deposits lenders must set aside as reserves to 5.5% from 6% on January 24, the first reduction since 2009. The yield on the 8.79% notes due in November 2021 fell one basis point to 8.23%.
